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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Washington 11, Detroit 8, Doc 6, Us 6, America 6, Apple 5, California 5, Casey 5, Obama 3, Nbc 3, Robert Reich 3, John Boehner 3, Boehner 3, Larry Kudlow 3, Jimmy Williams 3, Mr. Obama 3, Unitedhealthcare 2, Tom Curran 2, Kudlow 2, Mohammad Morsi 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    December 7, 2012
    7:00 - 8:00pm EST  

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there are about 6,000 publicly traded stocks, but the only one that anyone's focused on is apple, so i figured can't end the week without mentioning apple. i like apple. does that mean it's going to bottom right here? i have no idea. i've seen charters say close to 400. i've seen the death cross. i've seen this and that. i like the product. i think it's an inexpensive stock. and i think you should own it. and if you panic out of it, okay, you shouldn't have been in it good evening, everyone. i'm larry kudlow. this is "the kudlow report." a breaking story tonight with legal and financial consequences. the supreme court will rule on gay marriage. two separate cases scheduled for early next year. it's a social issue but also a big financial one. this will affect billions in
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federal and private benefit payments. now to the really big financial story, the fiscal cliff. house speaker john boehner says president obama has wasted another week by not making a real proposal. meanwhile, republicans are divided and senator rand paul on this show last night may have made the most constructive proposal of all. >> i'm happy not to filibuster it. i will announce tonight on your show i will work with harry reid to let him pass his big old tax hike with a simple majority if that's what harry reid wants. then they will be the party of high taxes and they can own it. >> all right. without that kind of republican strategic retreat, the december 31st deadline is not likely to be met. in today's jobs report it was positive and it beat the street and stocks went up. how do we move 150,000 jobs per month up to 300,000 which would be a real recovery? first up breaking news out of
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the supreme court this afternoon, the nation's highest court agreed to take up the explosive issue of same-sex marriage, agreeing to hear challenges to the federal defense of marriage act and california's proposition 8. nbc's pete williams joins us now from washington with all the latest details. good evening, pete. >> reporter: good evening, larry. the vilma case is the easier one. federal law signed into law by president clinton in 1996. it says if a person is legally married in a state, the federal government can't recognize those marriages. that's where you talked about federal benefits heterosexual couples get and same sex couples do not. the prop 8 thing is bigger. while potentially it's confined to the state of california only, the question it out there having given the right to gay marriage could the state then take it away through proposition 8 passed by a majority of the vote
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nurse 2008. having taken that case, the court could get to the bedrock issue. can any state refuse to let same sex couples get married under the federal constitution. it could potentially be narrow or very far. >> pete, as i understand it, let me ask you. this one of these things, maybe the driving one, is defense of marriage act was about paying the estate act. where one of the two people said she didn't have to pay the estate tax because a married couple wouldn't have to. >> reporter: this is a case from new york. a woman named edie windsor who married her partner in canada. the partner died and left edie the estate. the federal government said we can't recognize you as married. the irs says you're not married as far as we're concerned she got hit with a tax bill of $363,000. >> we'll leave it there. many thanks. nbc's pete williams. now let's get right to our panel tonight. democratic strategic jimmy
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williams. wabz radio talk show host mark seimone and washington times opinion writer cari picket. we have a number of topics to chew on this evening. let's begin with the breaking news out of the scouupreme cour and a legal challenge major implications for federal and private benefit payments. cari, let me go to you first and get your first reaction to this. federal versus state. constitutional liberty and rights. the end of the doma act. how do you see this? >> one of the first things that usually comes to my mind when i think about prop 8 was that you had the people of california, they looked at having this particular law upheld as simply because they're the ones who wanted it to happen. and the courts there decided no forget about it. it's simply not going to happen. not only that but if you remember, the donors who were supporting this law, they had a
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lot of people come after them during that whole scenario. also remember, a lot of businesses who whether it be say wedding photographers, wedding deejays, bank gbank get hauls wo may not be catering to same-sex marriages, they have been attacked very often by lawsuits because they may not necessarily be catering to same-sex marriages. saw this over in new mexico with elaine photography when a photographer said i don't care to photograph same-sex marriage ended up being sued. this lawsuit is still going on right now. >> jimmy williams, welcome back. just explain to me. i'm sure there's a logic to it. i always look at these things as social issues. i wish they were decided at the state level and not the federal level. why is this not decided at the state level? why must this go to the supreme court for a constitutional decision? >> well listen, i think if we look back at the history of this country when it comes to the
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issue of equality, would you ask the state of mississippi in 1960 whether they thought equal rights for african americans was something they should decide on solely? or do you think that was a national issue? i don't think there's anybody today that actually thinks that equal rights for anybody in this country should have been divided by a bunch of racists in the 1960s. or from my home state in south carolina. when you're talking about a group of people that are affected across the state lines, you can't just leave this up to the states. i get the theory or states rights. i'm from south carolina. i like states rights. but i don't like state discrimination. so the idea that the state of california, that people spoke in a proposition that was funded by the mormon church is out there say we're against equal rights for gays. that's nice. but the supreme court of california said actually that's not nice. that is discrimination. >> mark seimone, the obama administration stopped trying or deafing the defense of marriage
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act awhile ago. a lot of people got their back up over that but they let that go. i want to ask you if you agree. is it the financial ramifications that make this a federal issue or is jimmy write and it's really a civil rights issue? >> i don't know if i'm the one to ask. i don't think i'm even for heterosexual marriage. [ laughter ] >> i'm with mark. >> there's an economic benefit to this. obviously catering halls, wedding photographers, caterers, even divorce lawyers can make a lot of money here. the reason i think there has to be some federal law of ruling here, a marriage license has to be portable. people are going to prove state to state. clearly there are gay couples that need all kinds of protections. hospital visitation rights, civil protections of all kinds. i don't know if you call it the same as marriage but i'm starting to move more in that direction. >> stay put. we've got more work to do. 24 days until our economy falls off the tax and fiscal cliff. just where do we stand on a deal coming out of washington, d.c.?
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cnbc correspondent joins us with all the details. >> reporter: as you know the white house's strategy since the election has been to break republican resistance on two issues. one is tax rates and one is an increase in the debt limit. he hasn't succeeded or budged off that attempt so far which is why john boehner came out in a news conference today and slammed the white house for not being willing to compromise. >> four days ago we offered a serious proposal based on testimony of president clinton's former chief of staff. since then there's been no counter offer from the white house. instead, reports indicate that the president has adopted a deliberate strategy to slow walk or economy right to the edge of the fiscal cliff. >> a few hours later you had a slight indication of flexibility from the administration. vice president joe biden was out. he reiterated those two nonnegotiable demands on the part of the administration but said the actual amount of that
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top rate doesn't necessarily have to be 39.6. >> there are two irreducible minimum requirements. one, the top brackets have to go up. this is not a niabl issue. the second thing is, we have to have a mechanism to stop the brinksmanship on dealing with the national debt. >> now of course, this doesn't necessarily signal a turn in the talks between the administration and the congress. but there is the possibility that you have staff level discussions that continue to go on and we're just going to have to see over the next three weeks whether they can make a break. sometimes it looks darkest before the dawn. >> many thanks john howard. back to our panel. kerry, on this show last night, senator rand paul basically said you know what, no filibuster in the senate. let the democrats put their bill up and he will vote for it and
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make it a democratic tax hike period. end of sentence. elsewhere the republicans are very divided about tax hikes. is he right? is senator paul right? the republicans have to vote present in the house and nay in the senate. let the democrats win this. that's the only way this things's going to get done before december 31st. because other deals do not look like they're really possible. >> you know, i really tend to wonder whether or not republicans if they're willing to walk away from this and to have obama own it completely, if they'd be really ready to take on the messaging to make sure that they themselves will not take the blame. and this is something that they should really be willing to actually go out there and just take that messaging on. because remember, according to our constitution here, ordinarily it would be the house sets something up, set up a plan, and then the senate takes up their plan then they go into
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conference committee and they hash something out and get out all the bad stuff. and then it goes to the president. i tend to wonder why the idea of the conference committee here isn't really being considered. >> there's no time. you know that. this is going run down to the wire. i'm just saying, jimmy williams, there's so much division in the republican party. john boehner is trying to valiantly make a compromise. as he said today he's not getting anywhere at all, okay? mr. obama wants higher tax rates. he also wants more revenues from capping deductions. he wants no entitlement reform or nothing to speak of. no discussion of spending cuts. obama wants even more spending increases. and a lot of republicans, conservatives, are saying you know what? we don't want a tax hike at all. we give boehner credit but we don't want a tax hike. this is not the time. it's a very anemic economy. let's just let the democrats have their tax hike and we'll be
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done with it. other than that, jimmy, i don't think this thing gets done. that's what i'm coming around to. >> well, i think that there's a chance to that. a chance for that to happen in the scenario that you just described. but i don't think that is what happens. frankly, i think with the vice president saying today that the issue of whether the top rate is 39.6 or 37 it's really doesn't matter. that was a huge olive branch as our colleague just said. this is a signal, a smoke signal like a vatican smoke signal sent from the administration to speaker boehner today. >> but that's been out there before. >> i understand that. >> there's only a handful of republicans, what are you going to get, a percentage point? mark seimone, boehner went in saying no higher tax rates. we'll give you a cap on the deduction. that's $800 billion in tax revenues. a lot of his own caucus didn't even want to do that. now they'll fiddle around with
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37 or 38 or what not. why don't they just be done with is, mark? say all right, you want to do it. you won the election, mr. obama. we'll get the middle class tax cuts. we'll get the upper class tax hikes. get the capital gain and the dividends and the estates. you can only tax hike. that's what senator rand paul said last night. i'm starting to think that's the only way out. otherwise we're going into january, february,march and whatever. >> i think that's the best solution. it's a great chess move. let them do whatever they want and let's test the results. let's see what happens when you do it. then the mid-term elections will roll around and they'll be in great shape. the republicans will get voted in. another plan. you got spending up here, revenue down here. we got to narrow that gachlt they should make it clear to the democrats, pick any number of revenue increase you want. remember the spending cuts number has to be greater. let's see them live with that. >> that's the thing, mark. just to follow up on that. such an important point. everyone is obsessed with the taxes. taxes are very important. no one is talking about spending cuts. no one is even barely talking
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about the sequester, the across the board sequester. and mark, if you don't make a deal, the withholding tax rates start going up in january. the treasury and irs can postpone it but not for long. americans will feel those tack hikes in january. they'll really feel them in february. by march if there's no deal they're really going to start getting hurt and it's going to damage the economy. so what you're saying is, you got no tax cuts. they're all tax hikes. and on top of that, there's no spending. i don't think that's what the public wants. >> what i'm saying is the revenue increase has to be a smaller number than the spending cuts. democrats had better accept that. that's going to be the case. >> i don't know. you look at mr. obama's story, his revenue increases over the whole ten-year period are larger than his spending reductions according to most people who have made the score card. i don't think that's what people want. right now i'm not optimistic we're going to get this done by december 31nd.
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jim jimmy williams, mark seimone and kerry picket we appreciate it. again today the crowds are still demanding that president mohammed moed morsi step down. latest from cairo. free market capitalism is the best bet for -- i don't think we should be raising taxes at all. but that's my point of view. i'm kudlow. we'll be right back two years ago, the people of bp made a commitment to the gulf. bp has paid over twenty-three billion dollars
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to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.
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. tens of thousands of protesters are still surging around egypt's presidential palace. nbc reporter joins us now with the details. good evening, eamon. >> reporter: the media is reporting that the country's commission has ordered a vote scheduled to begin tomorrow in embassies around the world on the country's draft constitution to be postponed until wednesday. this is a significant development because for the past several days protesters have been demanding that president mohamed morsi rescind the decree that gave him absolute powers he issued a few weeks ago. more importantly they were demanding that he delay a nation-wide vote scheduled to
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take place on december 19th on this disputed draft constitution. the decision to postpone the vote is an indication that the president is perhaps considering delaying the vote. on saturday he is expected to meet with some members of the opposition. they don't represent the main oppositions forces but they are representative of some of the smaller opposition forces. there is an indication that perhaps this standoff between the president and protesters could be solved politically. moon while on the streets tens of thousands of protesters continued their sits in in both tahrir square and outside the presidential palace. an indication the situation in egypt remains very tense. nbc news, cairo. >> many thanks to nbc's reporter. here now is former pentagon adviser michael rubin michael rubin, is he going to survive? is mohammad morsi going to
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survive this? >> i think he probably won't survive. this he's a gambler but he's a very bad gambler. the situation he set up is this. when he passed his decree calling for his own dictatorial powers he said they would only last as long as there was no constitution. then he presented the egyptian people with a constitution which was much more extreme than he had promised. and so he kind of figures you either take me as a dictator you take this constitution. what the egyptian people are saying, none of the above. we want plan c. >> that's the thing. the constitution, this referendum, is not that good. it has much more muslim brotherhood. it has much more dictatorial powers. it has much more shirea law than economic and legal and moral freedom, michael. that's what it seems to be. i don't see morsi retreating from that. >> you're absolutely right on that. look, it's no surprise the muslim brotherhood and islamists won the sweeping election at
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first because they have been in opposition for 80 years promising people the world. they promised them free housing from guaranteed jobs, setting prices in the market. that's not the way you run a country. but from the second they won their first election, in the first round of the parliamentary votes until the second round of the presidential elections, they kept hemorrhaging support because the egyptian people were waking up and seeing religious rhetoric simply ain't going to cut it. now mohammad morsi realizes this is his last best chance because the egyptian people probable majority of them no longer want the muslim brotherhood. >> muss lump brotherholim brotht of the economy is in shambles. michael. i want to ask you finally how long before the military reassert themselves? i mean really reassert themselves? >> they really are the kingmaker, larry.
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again it comes down to money. and comes down to the economy. most americans know our generals through their war fighting. but most egyptians don't know their generals through war fighting because they've never won a war. they know them as businessmen. the reason the military were willing to give hamubarek the bt they figured they could keep their financial interests if they let in morsi. is the egyptian military going to make a deal with morsi or the people in tahrir square? the egyptian military wants to be the survivors. >> michael rubin, thank you. we'll be following this referendum which begins next week. it's been postponed. it's not just gay marriage. supreme court is also taking on a big business case with potential impact on drug prices. that's just one of the headlines we're taking a look just ahead. please stay with us. americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894,
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it's called paper delay. the supreme court is going to take it on, too. cnbc's brian shaktman joining us on that and more. >> thank you for having me on the show. listen pay for delay is what big pharma companies do when the patent on their blockbuster drugs run out. they delay launching cheaper
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versions of their most profitable products that. drives up prices for consumers and the government by billions of dollars every year. the court is going to decide whether this practice is a restraint of trade. it's a big stakes business case to keep an eye on. pilots at american airlines voted to ratify a new contract ending a long labor dispute and helping american parent amr as it tries to exit bankruptcy. and the "wall street journal" reported that u.s. air made an all-stock offer for amr that would value the two airlines at $8.5 billion. and finally larry, more companies getting on the increase or accelerated dividend bandwagon today including familiar names. phillips 66, macy's, vr horton. leading the pack seaboard dividend accelerator of $12 a share covers the next four years, larry. that is basically saying the rates might kick in and stay in. >> i think it's absolutely a statement about their worries
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about tax policy. brian shackman, thank you very much. let's be honest, folks. today's jobs report was okay. it was all right. but it's still way below potential. nothing to write home about. question, how do we put some real torque into this economy? make it a real american recovery story? i want 300,000 jobs a month, not just 150. we're going have a debate about it up next. [ male announcer ] when this hotel added aflac
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in this half hour, dozens of federal agencies are preparing to furlough workers and freeze spending if it appears likely we're going to go over the fiscal cliff and not meet the december 31nd deadline. me? i think that is a great development. finally cut some government waste and spending. oh, my goodness. meanwhile a black box data recorder revealed former new jersey governor jon corzine was doing 91 miles per hour in a 65 mile zone and he didn't have his seat belt on. and all that was contrary to what he first told us. why should all cars have the same kind of black box to settle lawsuits and find out who is lying? first up president obama heads to detroit monday. that's his first visit there in
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nearly months. this is mayor wing has just announced hundreds of layoffs in an effort to stave off the possible bankruptcy. but i don't think it's nearly enough. let's find out. joining me is detroit radio host doc thompson, wxyt talk radio. okay, doc, as i understand it you tell me if i'm wrong. about 11,000 detroit city workers and mayor bing is cutting 4 to 500. i'm not impressed with that. i think he should be cutting 20% of the workforce, not 5%. >> no, you're absolutely right, larry. the problem is they're still playing catch up. year after year they're like we got to run to catch up with it instead of coming out and getting in front of it. the city has shrunk in population. it makes sense. we have to shrink all those government workers. it's not that we don't want certain services, it's just what you have to do. we do it in our personal life or are supposed to. >> those unions don't want it. we saw the clip when this story first came up that gal on the city council said detroit delivered for barack obama in the election, he should now
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bring home the bacon for detroit. the unions don't want it. the media don't want it. i'm not sure if dave bing who was a great basketball player, maybe not such a hot mayor. this thing has to go under a financial control board, doc. you know that. they're incapable of governing themselves in detroit. >> the problem is, in michigan we just had a referendum on a pretty strong emergency manager law we had in place. we go back to the old one now. and it's weaker. and the one thing that it won't be able to do is renegotiate those government worker contracts. which is what we need. >> then maybe governor snyder's got to be tougher. maybe he's got to come in with executive powers, doc. i don't know the state constitution. just saying it's very clear first of all detroit may be the largest bankruptcy in the country that. may be right on its way. second of all they are not going to be bailed out. obama is spending enough money and raising enough tax hikes, anyw anyway.
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and third, they can't govern themselves. this is not a new problem. this didn't just happen last week. this has been going on for years. >> larry, 60 years it's been one-party rule. along with that comes one attitude. one ideal system. and it certainly hasn't worked. i have a couple of suggestions, though. we can pass the hat if you're willing to throw in a couple of dollars. we don't have a hat to pass because we're so poor. if you're willing to throw in a couple of dollars maybe we can do something here. >> i'm just saying somebody has a mandate. look we had this in new york city in the 1970s. know liked it. but then governor hugh carey, okay, bless his soul, mandated, forced, jammed through financial emergency control boards for the state, doc, and for the estimate nobody liked it. but new york was bankrupt. he had to do it. i think governor snyder has got to do the same thing. and i think mayor dave bing has got to also go along with that. otherwise they're going to be left in the lurch.
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there's no money in the federal till, doc. you know that. there's no money in the federal till to bail out detroit, especially after we bailed out gm and chrysler already. >> larry, i say let it fail. i'm sorry. you have. to i want those people to have local control. they fought for that local control. they should have a vote. the citizens of the city of detroit should have a vote. but it should fail when it goes wrong. that's what has to happen. the good news is we've now got in michigan as of yesterday we've got legislation pass today make michigan a right to work state. that's going to have a big impact down the road. >> i like that. i like the failure idea. free market capitalism is about success and failure. and as the great free market capitalist nobel prize winner wrote, of the two, doc, sometimes failure teaches us more than success. i like your point very, very much. all right. doc thompson coming out of detroit, thanks very much. now let's talk about the cuts plan for the federal workforce. with the countdown to the fiscal cliff at 24 days, the
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"washington post" reporting today that federal agencies are sharpening their plans before spending cuts, layoffs, fur lows and just general old down sizing. all if president obama fails to strike a deal, which i believe is increasingly likely. let's brung in distinguished fellow at the heritage foundation, form congressman old friend. ernie, i'm not shedding any tears over this. i think these fur lows and layoffs and downsizing is just what they need. >> i understand that the labor department report which came out today shows that 73% of the new jobs created since june are government jobs. we have 20 million people working for government at the federal, state and local level right now. and i can't tell you the exact mix between federal, state, local, but i do know that a huge number of the people who are on t payrolls are actually getting the money for those programs
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from the federal government. so the federal government should stop subsidizing states and cities and for that matter should not be putting extra burdens upon them with a lot of the federal laws. as we downsize the government we need to downsize the laws that's built up bureaucracy. >> but we also need to downsize the budget. so much of this stuff is just a lot of garbage. they say they're these horrible cuts. so we have to have furloughs. what they're really saying is that the growth of spending will be a little lower. that's what constitutes a cut. the growth of spending is lower. the growth of hiring is lower. and that's what's going on in washington. it's one of the worst-kept secrets. it's all flimflam, trying to fool the taxpayer who i don't think is fooled anymore. do you think, ernie, if we have these furloughs because of sequestration, across the board budget cuts actually kick in january 1nd, do you think this country will fall apart at least any worse than it already has?
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do you think the city of washington is going to implode? do you think federal government is not going to be able to do its job anymore? i don't believe any of that for one nano second. >> i think that's a no, no and no if i recall correctly what the questions were. the sun is still going to come up. right now i think the first place to start cutting, i would eliminate the jobs of the people that say there's no place to cut. if they can't find a place to cut get rid of them. >> this is the old washington monument syndrome. you know this. when i worked down there, anytime there's a little bit of cuts someplace people start saying we're going to have to close down the washington monument. we're going to have to close down the national parks. we'll never have another tour nift washington, d.c. it's all lot of crap, ernie. all this is would be a small reduction in the growth of the federal workforce. and god knows we could use that. >> i know up wouldn't it be wonderful if we could actually bring that down to a freeze or even a 1% actual cut? not in the growth but in what
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its is right now. >> i'd love that. >> unfortunately the language that washington uses is designed to conceal what's really going on. >> i know. >> we've got to make sure that reporters, you're doing a good job of focusing on the right things. other reporters should, too. >> got to change the whole budget baseline. this is a flimflam started in 1974. and it's been one of the greatest causes you're right. we ought to cut the level of spending back to last year or probably back to 2007 or 2008. >> i'll go for that. >> before this insane stimulus is put intolace with all the insane new hiring and the insane salaries, wages, pensions and health benefits, ernie. we ought to go after some of the levels of this stuff. that's what i want to see. levels. >> absolutely. with government employees proportionately typically and especially at the lower demanding jobs being paid significantly more than their counterparts are in the private sector. and cap all the benefits and everything. >> i'm not saying they're bad people. i had a good staff at the office
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of management and budget. we're not talk about that. that's a different story. ernie, thank you very much. >> leigh, let's march together. >> anytime. another mediocre jobs report. it wasn't awful. nonfront payrolls averaged just 139,000 in gains. that's over the last three months private payrolls a wee bit better. basically anemic 2% economic growth that is continuing. washington right now not the time to raise taxes with this kind of lousy growth. let's bring in some old friends, robert reich, former labor secretary and cnbc contributor, author of "beyond outrage" that's me. and casey mulligan professor of economics at the university of chicago and author of "the redistribution recession." casey, why would we even contemplate any tax increases? whether we call them revenues or tax rates or the kitchen sink? when we're still growing jobs at
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150,000 where it ought to be 300,000 a month? why are we pursuing these dumb policies, casey? >> you're exactly right. the job growth is barely keeping up with population. so we're not really growing the labor market. and labor market is way down from where it used to be. and high tax rates, high penalties for success are partly how we got there. i don't see why you'd want to add to that unless you want to do more of what we've done for the last five years which is of to go downward. >> robert reich, you may win this battle. the republicans may have to strategically give it over to mr. obama. then you'll have a recession on your hands. if not a recession, bob riech, these high tax policies are going to slow the growth, make it more anemic. >> let me partially agree with both you and casey. i think that the jobs report today was not good. i think that we are still in a jobs recession. we're still in a gravitational pull of the great recession. and i think we ought to have
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much more on the demand side. i mean i'm not a supply cider. i see that big companies are sitting on $2 trillion of cash. the people at the top are doing very well. the problem is the median wage keeps on going down. most people don't have the cash to keep buying. so the government has got to step in this is the worst time to raise taxes on the middle class. it's the worst time to cut golf spending. then we really are in a recession. that really will bring on a recession. >> do you agree with that, casey. the worst time to cut government spending? >> well most of this spending we've been doing lately is our transfers. and they're paying people for being poor. paying people for not working. i'm sure they appreciate the help. and it feels good to help them. but it doesn't get them out of poverty. it encourages -- discourages people from helping themselves. so the labor market's going to remain small. as long as we kind of act european with our help we're going to have a european labor market which is a small one. >> i think we are moving toward a european kind of economy in
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terms of austerity economics. if you look at what happened and what's happening in britain and spain and elsewhere, they have embarked upon deficit reduction. and what that has done is contract their economies when they still have very high unemployment, very high under utilization of a lot of resources that. means that their ratio of their debts to their total economies keeps on getting worse. if you want that kind of economy, that kind of austerity economics, well then what you want to do is raise taxes on the middle class and also cut government spending. if you don't you don't go that way. and casey, with all due respect, there are three people looking for jobs for every job opening these days. i don't see how you can say that they're being paid for not getting jobs. >> casey, why don't we put some incentives into this economy? why don't we make it pay to work after taxes? why don't we make it pay more to invest after tax? while we're doing that, casey, why don't we shrink the size and scope of government so that the private sector can keep its own
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resources and spend up more wisely than the government will? >> well, you're asking me the political question. i'm not sure. but it's definitely true that we're penalizing success. we have food stamp program now that has tens of millions more people than used to be on there. different types of people now, people who aren't poor in the lifetime sense of the word. they're having a temporary rough time. and they're on the food stamp program and they're welcome to stay there for a long time. we're going to be giving away free health insurance to people who don't work starting in 12 1/2 months. >> again with a great deal of respect, i think it's important to maintain a civil dialogue in this country. but let me just present the other side of this story. the reason we have so many people on food stamps, the reason we have so many people on unemployment insurance is because we are still in the gravitational pull of the great recession. these people don't want to be unemployed. most of them want jobs. most of them don't want to be on food stamps. that is not a good life for
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people. they want jobs. they want to work. there's just not enough work out there. why is there not enough work out there? not because the so-called job creators are not getting enough money. they are loaded. they've never been as wealthy as they are right now. the real problem is the middle class is shrinking. they don't have money in their pockets. >> quick last word, casey. >> i got a news flash for you. the economy only can contribute a small bit to food stamps and these other programs. the real thing is they change the rules. there's a whole new set of european rules for these programs. we used to have american rules. >> the europeanization not good. robert reich, it's wonderful to see you. casey, thank you for coming back on. we appreciate it. now the big stock story of the week is apple. the question is is a steep selloff really justified? do we all have a buying opportunity on our hands? this technical? is this capital gains? is this a fundamental problem with this great company? that's coming next up on "kudlow."
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question is why did other tech stocks do so much better than apple this week? c gate, western digital, dell, hp all in the green. apple deep into the red. here to explain it all, what do you make of that, zach in this apple selloff very disconcerting. will it continue? we have a web site commentary that are going to fall another 20%. i'm no expert. you are. tell me why. >> look, apple is a unique story. its rise in the past couple of years to be remember the largest company by market cap in the world, the kind of unbelievable virtuous buzz around its products and the whole apple ecosystem which i am having left blackberry and joined apple, i'm guilty as charged. once you're megacat company with the largest megastock in the world with an oversized percentage of money manager portfolios you start running into this it's really hard to keep going up and really easy to
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go down even if you execute well. >> don't think it's a sign of a global downturn or american downturn or sashiation with all these gadgets and so forth? >> we're wired as human beings to find greater portend in the media and stories. i understand the desire to read through this to some larger pictures. your numbers just there about the juxtaposition between apple going way down and these other tech companies doing a lot better, apple really from my mind right now is a unique story. i don't think it portends anything broken about the country per se. a lot of people say if apple is going to re-energize itself it needs the new thing. apple tv. the next new thing. that's probably true. it's true for any company in a fast-moving world. >> even i own an apple ipad. >> yes. >> that's got to be a sign of a peak in the whole story. i own an apple ipad. >> you're getting cool in the later years. >> all right, zach, let's move
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on. first of all europe's stocks are having are very good run. in fact stocks almost all around the world are having a very good run. they ain't doing too badly here in the usa. fiscal cliff or not. what do you make of that? >> first of all, we obviously see these things in terms of one-year period. if you add up january 1 of 2011 through let's say december 31st, 2012, a two-year period, let's say the markets end up a little bit more they're still going to be up about 8% annualized for two years. which is a really good compared to 1 1/2% on a 10-year note. but hardly what you would call this massive bull market a la the 1990s and 1980s. >> it's nice. but zach, if i could have had 8% a year for the last 15 years, you have to be in better shape than how i actually am. in the last 15 years it hasn't done anything. >> i think this is a testament to the fact the only game in town, you do talk about this a lot, larry, is that companies are net net relative to national
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economies better run and making money. so if you're going to invest in something, sovereign debt which we now know is not nearly as risk free as it looks is yielding a little amount of money because sovereigns are not effectival caters of capital. i think that as someone on the other side of the political fence. >> it's a great point. i do make that point. i'd rather be in the good private companies any day of the week. zach, thanks, buddy. the obama team wants black box recording devices in all cars. maybe it's good for safety. but what about your privacy? and how about those tort lawyers who make their living suing car companies? you know, somebody's going to tell the truth. sometimes the black box is a good thing. i'm larry kudlow. that story up next. bp has paid over twenty-three billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs
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the white house has given the green light to a plan that would require all future cars and trucks to be equipped with black boxes for gathering data in accidents. now former prosecutor tom curran will try to defend this or attack this. i want to raise one point. with a great friend of ours, jon corzine, the former governor of new jersey and former senator and former banker. now okay, so he gets in this terrible accident. i wouldn't wish that on anybody. but it turns out he fibbed when he described the accident. he was actually doing 90 miles per hour in a 65 zone. and he didn't have his seat belt on.
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and he didn't fess up to that. and this black box thing caught him. now i think that's quite useful. not just for corzine, which i enjoy, but for everybody. >> okay. see, you can't use examples like that. the one i like is lieutenant governor massachusetts murray who said i was driving near the speed limit. he was going 100 without his seat belt. you can't use -- what you're losing here is a little bit of freedom. freedom dies a thousand deaths. you make this information available and prosecutors and law enforcement and without rules, by the way, there aren't any guidelines here. and they will take advantage of it. >> what about -- lawsuits, lawyers, you got federal regulators. i mean look, we have it in airplanes. why shouldn't we have it in cars? i probably have one in my suv. i don't even know. i don't even care. it doesn't infringe on my personal liberty. >> but see it might. right now the car companies put them in 90% of the cars roughly. but they're even warning about
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the regulations here. the great regulatory industrial complex reaching out for more information about people. >> you mean beyond this. >> yes. >> what kind of information? >> you know, they record atmospherics, record where you are, they record your location. and the supreme court back in january said that the police need a warrant before they can put a gps on your car. isn't this just an end run around that? >> you know, i remember years ago, and you do, too, the great james buckley, bill buckley's brother. >> yes, i do. >> ran for re-election in the senate in 1976. an i love mr. buckley. >> still angry about that. >> so look, he ran against putting seat belts on. and he got whooped by pat moynihan. this reminds me a little bit of that. i think the black box information thing is something whose time has come. you can't get rid of it. it's too valuable in court, tom. >> but see you have to balance things. court will take care of itself. the laws will take care of themselves.
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personal liberty, where you go, what you do, what you're doing while you do it there has value. >> liberty has value. okay. thanks to tom curran who got it right. finally tonight, a salute to a dwindling band, most of them crowding 90 or already there. survivors of pearl harbor on this pearl harbor day. the devastating attack 71 years ago today. the survivorers went on to fight across the pacific throughout the war, came home to build the peace. those that are able still show up at pearl. keeping america great for all these years. i thank them. i salute them. i salute all them and their families for god's service to america. have a great weekend, everybody. i'm larry kudlow. we'll see you on monday.
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